Document Type

Presentation

Publication Date

May 2003

Conference / Event Title

FTC-DOJ Health Care and Competition Law and Policy Hearings

Abstract

Event descriptionThe Federal Trade Commission and Department of Justice will commence public hearings in Washington, D.C. on February 26, 2003 on the implications of competition law and policy for health care financing and delivery. The hearings will broadly consider the impact of competition law and policy on the cost, quality, and availability of health care, and the incentives for innovation in the field.Specific subjects to be considered include hospital mergers, the significance of non-profit status, vertical integration, quality and efficiencies, the boundaries of the state action and Noerr-Pennington doctrines, monopsony power, the adequacy of existing remedies for anticompetitive conduct, and the implications of the Commission's consumer protection mandate with regard to the performance of the health care financing and delivery markets.The goal is to promote dialogue, learning, and consensus building among all interested parties. The FTC and the DOJ plan to hold three to five days of hearings per month between March and September 2003, exclusive of August 2003.Session descriptionA "most favored nation" (“MFN”) clause is a contractual agreement between a supplier and a customer that requires the supplier to sell to the customer on pricing terms at least as favorable as the pricing terms on which that supplier sells to other customers. These clauses are not infrequently found in contracts health insurers enter into with hospitals or physicians. They allow the insurer to be confident that the reimbursement rates it pays providers are no greater than those that its competitors have negotiated. MFNs, however, may raise competitive concerns because they can discourage providers from lowering the reimbursement rates they offer to some insurers. Consequently, the agencies continue to receive and evaluate complaints about MFNs to determine whether they merit more complete investigation and enforcement action. This session will consider the following questions: What are the pro-competitive justifications for MFNs? What competitive concerns do they raise? What are the Agencies’ prior enforcement activities with respect to MFNs, and what are the characteristics of the market and/or the contracts that lead to such action?

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